SMS CO., LTD.(Securities Code: 2175/TSE 1st section)

Presentation Material for InvestorsFinancial Results Summary for the First Half of the Fiscal Year Ending March 31, 2020 (the 17th Fiscal Year)

October 30, 2019

© SMS CO., LTD. 1

Table of Contents

P3-P91 1H FY03/20 Consolidated Financial Results

P11-P432 FY03/20 Strategy

3 P45-P61Appendix

© SMS CO., LTD. 2

1 1H FY03/20 Consolidated Financial Results

2 FY03/20 Strategy

3 Appendix

P3-P9

P11-P43

P45-P61

© SMS CO., LTD. 3

1

58 383 835 1,545 2,715

5,177

7,172 7,618 8,692

10,181

12,046

15,056

19,069

23,054

26,611

30,837

37,557

-5 49 108 269 415

1,238 1,266 1,530

1,734 1,990

2,340 2,693

3,509

4,430

5,007

5,979

6,854

FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 FY03/19 FY03/20

Net sales (in black)Ordinary income (in blue)

Historical Financial Results and FY03/20 Forecast

Trends in net sales and ordinary income [JPY million]

Expect to achieve growth in both sales and profits for the 16th consecutive year since our establishment.

[Forecast]

© SMS CO., LTD. 4

1 1H FY03/20 Consolidated Financial Results

Achieved growth in both sales and profits by expanding businesses steadily. Marked steady progress to meet the FY03/20 guidance, while 1H profits were

below the forecast due to factors including additional hiring of career partners for the growing recruiting agent business.

Consolidated P/L Statement [JPY million]

1H FY03/19Actual

1H FY03/20Forecast

1H FY03/20Actual

YoYChange

vs.Forecast

Net Sales 15,040 18,358 17,628 +17％ ▲4％

OperatingIncome 1,953 2,586 2,074 +6％ ▲20％

OrdinaryIncome 2,905 3,529 3,119 +7％ ▲12％

NetIncome 2,157 2,577 2,319 +8％ ▲10％

© SMS CO., LTD. 5

1 The Career Segment (1H)

Elderly Care Career• Recruiting Agent (RAG) for care workers recorded strong growth mainly due to the increase in the

number of career partners.Medical Care Career• RAG for nurses marked steady progress. • RAG for dietitians and WILLONE*1 grew significantly.• RAG for childcare workers, a new business launched in Oct. 2018, grew as planned.

Segment sales increased 21% YoY. Hired 290 career partners in 1H, exceeding the original plan.

_1H FY03/19 1H FY03/20 YoY

ChangeElderly Care

Career 3,802 5,426 +43%Medical Care

Career 6,732 7,371 +9%

Total 10,534 12,797 +21%

YoY Comparison of Sales[JPY Million]

Highlights

*1. WILLONE provides career services for Judo therapists and licensed masseurs such as finger pressure practitioners, acupuncturists, and moxibustion practitioners.

© SMS CO., LTD. 6

1 The Elderly Care Operators Segment [Kaipoke] (1H)

• The number of Kaipoke memberships increased steadily.- 25,850 service offices [17,850 locations*1] as of Oct. 1, 2019.

• Sales of optional add-ons such as additional tablets, smartphones, and factoring service increased.

Segment sales increased 22% YoY.

_1H FY03/19 1H FY03/20 YoY

ChangeElderly Care Operators[Kaipoke]

1,866 2,282 +22%

Highlights

YoY Comparison of Sales[JPY Million]

*1. # of locations: the number of elderly care service office locations # of service offices: the number of elderly care services provided based on the public elderly care insurance scheme e.g. When an operator provides two types of elderly care services, home care support service and home-visit elderly care, at one specific address, the number of locations is counted as one and the number of service offices is counted as two. Kaipoke’s subscription fee is charged at each membership location. Normally, the number of locations is smaller than the number of service offices.

© SMS CO., LTD. 7

1

_1H FY03/19 1H FY03/20 YoY

Change

Overseas 2,127 2,046 ▲4%

MIMS's existing businesses grew YoY. Global Career Business marked steady progress, while its sales decreased

YoY due to the consolidation timing of a Korean subsidiary*1 and changes in the immigration process for Malaysian healthcare professionals (HCPs).

The Overseas Segment (1H)

MIMS’s Existing Businesses• Sales grew steadily despite negative effects of the foreign exchange rates.Global Career Business• Changes in the immigration process for HCPs from MY*2 to SA*2 prolonged the lead time*3 for 2-3 months.• Acquired CCM, a recruiting agency introducing European and Oceanian HCPs to Middle East hospitals, in

Aug. 2019.

YoY Comparison of Sales[JPY Million]

Highlights

*1. Reorganized Medilabs, a company providing career-related services for nurses in Korea under MIMS group in Mar. 2019. MIMS P/L statement is consolidated with a three-month delay and Medilabs started to be consolidated from Q2 this fiscal year. *2. MY: Malaysia SA: Saudi Arabia*3. The lead time between Offer Accepted and the start of employment. Offer Accepted means the event that an applicant accepts a job offer from a hospital. Sales are recorded when an applicant starts working.

© SMS CO., LTD. 8

1

Establish No.1 position as a global recruiting agency for healthcare professionals (HCPs) by expanding countries for sourcing HCPs and acquiring job orders.

Build a supply platform of HCPs for both domestic/cross-border introductions.

Build a supply platform of HCPs

Build a supply platform of HCPs

Each country Each country

EuropeUS

Oceania

HCPs Hospitals

Middle East

Cross-border introduction

Domestic introduction

Strategy of Global Career Business

Expa

nd c

ount

ries

Expa

nd c

ount

ries

Expa

nd c

ount

ries

Expa

nd c

ount

ries

Asia

EuropeUS

Oceania

© SMS CO., LTD. 9

1

Satisfy high-price job orders from hospitals in the Middle East (ME) by introducing European/Oceanian healthcare professionals (HCPs).

Promote introductions of Malaysian/Filipino HCPs to CCM’s hospital accounts in ME. Develop hospital clients in Europe/US/Oceania for further business expansion.

Saudi Arabia

UK

UAE

Australia New Zealand

Ireland UK

Ireland

High

Malaysia

Philippines

Sala

ryof

HC

Ps（

Intr

oduc

tion

Fee）

*1

LowAustralia

Introduce high-price HCPs Promote cross-sell inME countries

Develop clients inEurope/US/Oceania

Qatar

US

1 2

3

etc.

*1. HCPs in ME hospitals are usually categorized depending on the countries where they were educated, and the demand and salary level for them vary by category.

HCPs Hospitals

Acquisition of CCM

etc.

etc.

© SMS CO., LTD. 10

1 1H FY03/20 Consolidated Financial Results

2 FY03/20 Strategy

3 Appendix

P3-P9

P11-P43

P45-P61

© SMS CO., LTD. 11

22

We aim to improve the quality of lifeby providing information infrastructure

for aging society.

Our Mission

© SMS CO., LTD. 12

2

Elderly Care Medical Care

Healthcare

Senior Life

Define our business domains in aging society as Elderly Care,Medical Care, Healthcare and Senior Life.

Business Domains in Aging Society

© SMS CO., LTD. 13

2

Started our business in Japan and have established a leading position in this attractive market with an enormous growth potential.

Expanding our businesses into the growing Asian and Oceanian markets.

Where We Operate

JapanKoreaChinaHong KongTaiwanSingaporeMalaysiaIndonesiaThailand

VietnamPhilippinesMyanmarIndiaAustraliaNew ZealandUAEIreland

© SMS CO., LTD. 14

2

6 9 15

28 38

49 7

10

33

41

57

96

2005 2015 2025

Healthcare Expenditure*1 in Japan

*1. Source: SMS estimates based on MHLW, METI, and WHO statistics*2. Source: 2005/2015-WHO 2025-SMS estimate *3. Excluding Japan

The healthcare-related markets are expanding rapidly because of the aging population in Japan and the economic growth in Asia.

Market Size

Elderly Care

Medical Care 30

115

250

2005 2015 2025

Healthcare Expenditure*2

in Asia and Oceania*3

Healthcare(Non-insurance)

JPY trillion

JPY trillion

© SMS CO., LTD. 15

2

Dietitians

Physical therapists

NursesHospitals

Clinics

Elderly care operators

The elderly

Care workers

The elderly in need of care

and his/her family

Recruiting AdsRecruiting

Agent

Management support

Online community

Housinginformation

Prevention of dementia

Qualification

Information infrastructure is a platform to support people in aging society through information.

Aging of society causes information gaps related to elderly care, medical care, healthcare, etc., creating enormous business opportunities for us.

Information Infrastructure

© SMS CO., LTD. 16

2

Address social issues that arise in aging society and contribute to improve the quality of lives of workers, operators, and end users.

Improving the Quality of Life

Workers

End users

Operators

•High-quality elderly care/medical care

•Extension of healthy life expectancy

•Better decision making

•Variety of job options•Best workplace• Improved skills•Motivation for work

•Efficient management•Better service quality•Hiring and retention of professional workers

•Enhanced productivity

© SMS CO., LTD. 17

2

Medical Care

ElderlyCare

SeniorLifeHealthcare

Workers

Operators

End users

Kaipoke

Stak

ehol

ders

Business Domains

Operate Elderly Care Career, Medical Care Career and Kaipoke as our core businesses in Japan.

Develop new businesses mainly in Healthcare and Senior Life.

Business Segments

BusinessDevelopment(Healthcare) Business

Development(Senior Life)

Medial CareCareer

Elderly CareCareer

Actively develop new businesses in other areas.

© SMS CO., LTD. 18

2

Kaipoke・ Management support platform

for elderly care operators

Career Business - Medical Care Career・ No.1 recruiting service provider for medical care workers

Strategic Units

Overseas Business (MIMS)・ Asia’s No.1 drug information service provider・ Expanding career business from Asia to global

New Business・ Developing new businesses mainly in Healthcare

and Senior Life

Medical Care Career has been driving our growth since our establishment. Elderly Care Career, Kaipoke and Overseas businesses are growing as the

new pillars of our business portfolio.

Growth Track

Breakdown of Net Sales

3％

18％

13％

26％

40％

6％14％

13％

17％

50％

New Business820 (8％)Overseas 106(1％)

Kaipoke360 (4％)

15％

72％

Career Business - Elderly Care Career・ No.1 recruiting service provider for elderly care workers

(JPY million)

© SMS CO., LTD. 19

2

On top of the solid expansion of Medical Care Career, we accelerate the growth of Elderly Care Career, Kaipoke, and Overseas Business.

Actively develop new businesses to create next pillars of our businesses, which will further drive our long-term growth.

Growth Scenario

Present Future

Growth of Overseas Businessdriven by MIMS

Growth of New Business

Growth of Kaipoke

Growth of Elderly Care Career

Growth of Medical Care Career

© SMS CO., LTD. 20

Career Business

© SMS CO., LTD. 21

2

1,496K 1,538K 1,572K 1,603K 1,634K 1,660K 1,683K

10.9% 11.0% 11.0% 10.8% 10.9% 10.9% 10.9%

2011 2012 2013 2014 2015 2016 2017

Jobs-to-applicants ratio of nurses*2

0.0

1.0

2.0

3.0

4.0

0.0

1.0

2.0

3.0

4.0

1,557K1,696K 1,773K 1,867K 1,925K 1,936K 1,975K

16.1% 17.0% 16.6% 16.5% 16.5% 16.7% 16.2%

2011 2012 2013 2014 2015 2016 2017

Number of care workers and their turnover rate*1

Jobs-to-applicants ratio of care workers*2

Number of nurses and their turnover rate *3

*1. Sources︓Number of workers – MHLW; Turnover rate – Care Work Foundation*2. Source : MHLW *3．Sources︓Japanese Nursing Association; Number of workers in 2017 – SMS estimate

# of workers CAGR︓4％ # of workers CAGR︓2％

Care workers

All industries

Nurses

All industries

2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018

Labor shortage continues to be a serious issue despite the increasing numbersof care workers and nurses.

Environment︓Care workers and Nurses

© SMS CO., LTD. 22

2

Occupations

Services

① Expand market share

③ Increase occupation coverage

＋α

RAD*1

Education

RAG*2

Temp staffing

Retentionsupport

Nurses Careworkers

Allied healthprofessionals

Care managersPT/OT/ST Therapists ＋α

② Diversifyservices

CareerServices

Childcareworkers

Community

*1. Recruiting Ads *2. Recruiting Agent

Contribute to mitigate labor shortage problem by expanding the market shares of the existing services, diversifying service offerings, and increasing the variety of occupations we cover.

Strategy of Career Business

© SMS CO., LTD. 23

2

HCPs

① Expand Market Share

Created the market as a pioneerand

lead the market as No.1 player

Recruiting Agent (RAG) for nursesNo.1 share

RAG for allied health professionals

No.1 share

RAG for care workersLeading market expansion

As a pioneer, we created attractive markets of recruiting services for elderly and medical care workers and established No.1 positions.

Continue to increase the market shares by leveraging a large number of both healthcare professionals (HCPs) and job orders we have accumulated.

Accumulated onlinemarketing know-how byconducting it in-house

Operators

Develop strong relationships with operators by introducing many job seekers

© SMS CO., LTD. 24

2

The labor shortage in elderly care is worsening due to the rapid aging of population, the gap between demand and supply of care workers beingexpected to reach 340,000 in 2025.

② Diversify Services - Demand and Supply of Care Workers

*1. Source: MHLW. 2017 - SMS estimate.

2017 2018 2019 2020 2021 2022 2023 2024 2025

0.1 million

The gap between demand and supply will expand to 0.34 million.

2.08 million

1.98 million

Care Worker Demand-Supply Forecast*1

Demand for care workers

Supply of care workers

2.45 million

2.11 million

© SMS CO., LTD. 25

2

Improve the shortage of workers by providing diverse services.• Promote new entry from other industries in addition to support for changing jobs.• Contribute to improve productivity of workers and reduce their turnover through

education and retention support.

② Diversify Services - Strategy of Elderly Care Career

Certification course information School

Qualification obtaining support

Recruiting Ads

Recruiting Agent

Temp staffing

Introduce best

workplace

Other industries

Promotenew entry

Potential workers

Accumulateinformation

Elderly care operators

Improveproductivity

Promote entry

Support retention

Other industries

Care workers

Supportjob

change

Workersplatform

Operatorsplatform

Accumulateinformation

© SMS CO., LTD. 26

2

Enter promising markets to develop new growth businesses following Recruiting Agent (RAG) for nurses and elderly care workers.

Started career services for Judo therapists/licensed masseurs*1 in FY03/18 by M&A and launched RAG for childcare workers in FY03/19 by ourselves.

③ Increase Occupation Coverage

0.0

1.0

2.0

3.0

4.0

2012 2013 2014 2015 2016 2017

Nurses

Judo therapists/Licensed masseurs

PTOTST Care

managers

Dietitians/Registereddietitians

1.66

0.21 0.200.16

0.24

Childcare workers

0.50

Number of Workers*2 [million] for Occupations in the Career Segment

Jobs-to-Applicants Ratios*3

The jobs-to-applicants ratio for childcare workers has risen in metropolitan areas

such as Tokyo (over 5 times)

Childcareworkers

All industries

Care workers

Judo therapists

*1. Finger pressure practitioners, acupuncturists, and moxibustion practitioners*2. Sources: Care workers/Care managers: MHLW 2017, Nurses: Japanese Nursing Association 2016, Childcare workers/Dietitians/Licensed dietitians:

SMS estimates based on MHLW data 2017, Judo therapists/Licensed masseurs: SMS estimate based on MHLW data 2016, PT/OT/ST: MHLW 2017*3. Source: MHLW

Careworkers

1.98

© SMS CO., LTD. 27

2

Acquired WILLONE in Nov. 2017. Accelerate its growth by applying SMS’s know-how and expanding Recruiting

Agent (RAG) service.

③ Increase Occupation Coverage - Judo Therapists/Licensed Masseurs*1

*1. Finger pressure practitioner, acupuncturist, and moxibustion practitioner*2. Recruiting Ads

Judo therapistsLicensed masseurs

Workers

Acupuncture clinics

Rehabilitation facilities

Operators

RAD*2

RAG

Strengthen synergies

Increase introduction

School Textbook for the national exam

Qualification obtaining support

Expand employment

support

• Expand RAG• Apply know-how of job-

seeker attraction and matching

© SMS CO., LTD. 28

2

Elderly Care Career︓7,974 JPY million*3

: Sales for FY03/19: Estimates of the future sales

*1. Career businesses for doctors and pharmacists are operated by M3 Career, Inc., a JV between M3, Inc.(51%) and SMS (49%).*2. RAG: Recruiting Agent RAD: Recruiting Ads *3. Sales for FY03/19

Current and future sales by service*1*2

The Career Segment as a whole has huge growth opportunities. Increase in the market shares of existing services, rapid expansion of Elderly

Care Career and services for newly-covered occupations drive the growth.

Growth Scenario

RAG for PT/OT/ST

RAG for care managers

RAG for Nurses

RAG for other co-medicals

RAD fornurses

RAD for newly-graduated nurses

Medical Care Career︓12,423 JPY million*3

RAG/RAD forJudo therapists etc.

RAG for childcare workers

RAD for care workersSchool

Temp staffing

RAG for Care workers

Full-scale expansionstarted in FY03/17

Launched by acquiring WILLONE in FY03/18

Launched in FY03/19

© SMS CO., LTD. 29

Kaipoke

© SMS CO., LTD. 30

2

*1. Sources︓Number of elderly care service offices – MHLW; The elderly population – MIC*2. As of Mar. 2019

Operators that Kaipoke covers*2

・Home care support services・Home-visit elderly care・Day care・Home-visit nursing・Outpatient rehabilitation etc.

Operators that Kaipoke doesn’t cover *2

・Commuting care for elderly with dementia・Short stay・Daily life care for elderly in specific facilities・Small-sized multifunctional in-home care・Facilities etc.

The number of elderly care service offices and the elderly population*1

# of elderly care service offices CAGR:5% (million)

(thousand)

39 41 43 46 48 51 54 54 55

129 135 143153 162

172 179 186 189

168176

186199

210223

233 239 24429.6 29.8

30.8 31.9

33.0 33.9

34.6 35.2 35.6

2010 2011 2012 2013 2014 2015 2016 2017 2018Not included in Kaipoke coverage Included in Kaipoke coverage

The number of elderly care operators continues to increase as the populationages.

Environment︓Elderly Care Operators

© SMS CO., LTD. 31

2

Kaipoke is a management support platform provided in the form of SaaS, which offers more than 40 services to improve the management efficiency of elderly care operators.

Kaipokeʼs Business Model

RecruitmentRecruitment

Business supportBusiness support

FinanceFinance

PurchasingPurchasing

Management support platform

Accumulation of information

Service providers

OperatorsIn-home care

supportHome-visit elderly

care

Day care

Home-visit nursingPartner A

Partner B

Partner C

Outpatient rehabilitation

Monthlysubscription

fee

Managementsupport

Service development

Servicedevelopment and provision

Insurance claimInsurance claim

Elderly care management data

+α +α

© SMS CO., LTD. 32

2

Add moreservices

Operator types

Services

Operation improvement

Finance

Insurance claim

Marketing

Purchasing

Home caresupport

Home-visitelderly care Day care Home-visit

nursingOutpatient

rehabilitation ＋α

Recruitment

＋α

ManagementSupport Platform

Expand marketshare

Increase operatorcoverage

Maximize value as a management support platform by expanding the market share, adding more services and increasing types of operators we cover.

Contribute to enhance the management efficiency and the service quality of elderly care operators.

Strategy of Kaipoke

© SMS CO., LTD. 33

Overseas Business

© SMS CO., LTD. 34

2

Healthcare Data

HCPplatform

Career portal site

Drug database

Career Service

Pharma Marketing

HCPsMedical and

healthcare-related companies*1

Hospitalsand Clinics

*1. Include pharmaceutical companies, medical equipment manufacturer, healthcare-related service providers

Overseas businesses are built on the strengths of MIMS, which include its overwhelming brand value in Asia and Oceania, enormous membership base of healthcare professionals (HCPs), and strong relationships with medical and healthcare-related companies and hospitals.

Strategy of Overseas Business 1/3

© SMS CO., LTD. 35

22

Medical and healthcare-related

companies

Healthcare professionals Drug

informationNews

Academic conferencesand events

Education ResearchOnline community Pharma

companiesMedical device manufacturers

Healthcare service

operators

+α

+α

Increase clientaccounts

Increase clientaccounts

Develop marketing channels

Develop marketing channels

Strengthen membership base

Strengthen membership base

Optimizedmarketingsolutions

Maximize the value as a marketing platform and provide optimized solutions to meet customer needs by strengthening the membership base, increasing client accounts and developing marketing channels.

Strategy of Overseas Business 2/3 (Pharma Marketing)

© SMS CO., LTD. 36

2 Strategy of Overseas Business 3/3 (Global Career Business)

Build a supply platform of HCPs

Build a supply platform of HCPs

Each country Each country

EuropeUS

Oceania

HCPs Hospitals

Middle East

Cross-border introduction

Domestic introduction

Expa

nd c

ount

ries

Expa

nd c

ount

ries

Expa

nd c

ount

ries

Expa

nd c

ount

ries

Establish No.1 position as a global recruiting agency for healthcare professionals (HCPs) by expanding countries for sourcing HCPs and acquiring job orders.

Build a supply platform of HCPs for both domestic/cross-border introductions.

Asia

EuropeUS

Oceania

© SMS CO., LTD. 37

New Business

© SMS CO., LTD. 38

2

Develop new businesses mainly in Healthcare and Senior Life. Capture the growing needs for prevention of diseases and services not covered

by public insurance schemes.

Focus of Business Development

Domains Outline Services

Healthcare

Services such as health guidance, disease prevention, and industrial health services etc.

Senior Life

Services to connect operators and end users in areas such as elderly care, housing, and end of life planning.

Home-delivered meals search site

Web community for peoplecaring for their families

Web community for dietitians

Q&A site on health

Information portal of dementia

Solution for dementiaprevention

Habituation support of dementia prevention

Preventive solution oflifestyle diseases

Health guidance solution

Housing renovationoperators search site

Information of funeral companies

Information portal of housing for the elderly

Remote industrial health service

Information portalof industrial

health service

Health maintenance/promotion

support for women

Information portal of diabetes

Preventive solution forworkforce departure

due to family care

Personalizedanti-smoking solution

© SMS CO., LTD. 39

2

Provide remote health guidance services to health insurance associations*1. Contribute to prevent lifestyle diseases of the insured people through effective

health guidance.

Healthcare - Remote Health Guidance

ConsultationConsultation

Registered dietitians

Medical specialists

Chat My Data

Medical checkup resultsBlood testing

Number of steps Activity amount

Body weightBlood pressure

Meal photosInterview & questionnaire

Chat data

Recipients of consultation

Health insurance association

Prevent lifestyle diseases of the insured

Effective coaching methods based on the results of the analysis

Recruitment from our online community of dietitians

*1. In Japan, employees and their dependents are usually enrolled to public health insurance by joining the health insurance association of the employers.

© SMS CO., LTD. 40

2

Provide industrial health services that combine visits and remote support to companies.

Contribute to enhance employees’ health by providing comprehensive support for operations related to industrial health.

Healthcare - Remote Industrial Health Service

Online interviewOnline interview

Industrial health nurses

Industrial physicians

Company

Stress check Preparation of records

Health committee

Employee

Visits and workplace motoring

Visits and workplace motoring

Interview setting

• Enhance employees' health

• Develop industrialhealth system

Industrial health outsourcing

Recruitment from our online community of nurses

© SMS CO., LTD. 41

2

HCP networks

Results from verification projects*1ICT knowledge

Leveraging our strengths in healthcare professional (HCP) networks, ICT knowledge, and proven results from verification projects conduced with ministries and national agencies, we provide inexpensive and effective solutions for health and disease-prevention.

Healthcare - Our Strengths

Enables us to provide inexpensive and efficient services using ICT.

Enable us to provide services with proven effectiveness.

Enable us to recruit skilledHCPs essential for healthcare services.

Inexpensive and effective solutions for health and

disease-prevention

*1. Joint projects with MHLW, METI and national hospitals

© SMS CO., LTD. 42

2

Increase target clients and users

Maximize the value offered and contribute to increase healthy workforce by adding more services and expanding target clients and users.

Strategy of Healthcare

＋α

Health guidance

Industrialhealth service

Remote healthguidance

Anti-smokingprogram

Support for employeescaring for families

Corporate HIAs*1 Industrial HIAs ＋α

Aggravationprevention

Mutual aid associationsLocal governments

Small and medium sized companies

Stress check

Health management consultation

Promotion to take med-checkups

For c

ompa

nies

For H

IAs

Client types

Maximize valueAdd more services

Services

HealthcareServices

*1. Healthcare insurance associations

© SMS CO., LTD. 43

2

Develop services to connect operators and end users to meet various needs in the aging society, such as elderly care, housing, and end of life planning.

Contribute to improve the quality of lives of the elderly and their families by helping them make better decisions.

Strategy of Senior Life

Funeral

Elderly care

End of life planning

Housing

Inheritance

Grave/Buddhist altar

Nursing home

Welfare equipment

Meal

Renovation

Rebuilding

Sale of real estate

Online community

Matchingservices

Collect information

Provideinformation

The elderly and families

Operators

... +α

...

Introduction

Fees

© SMS CO., LTD. 44

1 1H FY03/20 Consolidated Financial Results

2 FY03/20 Strategy

3 Appendix

P3-P9

P11-P43

P45-P61

© SMS CO., LTD. 45

3 Business Models of Recruiting Agent and Recruiting Ads

Business model of Recruiting Agent

Business model of Recruiting Ads

Website

Recruiting ads

Sales activity

Fee

Receive a certain percentage of an annual salary from a hiring business operator as a fee when an applicant joins it.

Receive a fee for each application for a job via our Recruiting Ads website.

Fee

Registration

Website

Job orders

Attracting job seekers Sales activity

Matching MatchingNurses HospitalsCareer partner

Elderly careoperators

Care workers

Application Elderly careoperators

Care workers

Registration

Attracting job seekers

© SMS CO., LTD. 46

3 Kaipokeʼs Main Services

OperationImprovement

Recruitment

Finance

InsuranceClaim

Subscription-based management support platform providing more than 40 services as a package*1

SalesSupport

Elderly care operators can claim for the reimbursement of insurance efficiently.

Provide SMS’s industry-leading Recruiting Ads service "Kaigo Job" for free.*2

Provide one iPad for free to enable care workers to complete documentations at their customer sites.

Provide factoring services to improve operators’ cash flows.

Offer a function to prepare sales leaflets and a list of care managers who are the sales target of elderly care operators.

*1. Additional payments are required for the use of two or more iPads, factoring, etc. *2. Charged for some types of occupations.

Purchasing Elderly care operators can procure various equipments and supplies, such as rental smartphones, in an easy and inexpensive way.

OpeningSupport

Support procedures needed to open an elderly care business such as application for designation, financing, finding office properties and market research.

© SMS CO., LTD. 47

3

Penetrated the market as a discounter of insurance claim system. Changed the service concept in 2014 and established a unique position as a

provider of a management support platform for elderly care operators.

Concept Change of Kaipoke

Before February 2014 Since February 2014

Operationimprovement

RecruitingAds

Finance

Marketing

Purchasing

Management support platformInsurance claim

system

• Intense competition among many providers of on-premise insurance claim system

•SMS entered the market as a discounter with ASP*1 type service

•Provide highly differentiated services such as the industry No.1 Recruiting Ads service via the management support platform.

JPY 3,000 /month（ARPU)

Insurance claim

system

*1. Application Service Provider︓business providing computer-based services to customers over a network

JPY 20,000 /month（ARPU)

© SMS CO., LTD. 48

3

The number of memberships is increasing in accordance with our strategy, despite a temporary decline right after the concept and price change.

Kaipoke Memberships

Public elderly care insurance started

Many companies entered the market

2000 Feb.2014

# of Kaipokememberships

Apr.2015

Apr.2010

Oct.2019

25,850 service offices（17,850 locations）

Future

Changed the service concept and price

Only insurance claim system Management support platform

© SMS CO., LTD. 49

3

Founded 1963

Business･Pharma Marketing･Healthcare Data・Career Service

Globalcoverage

17 countries and regions mainly in Asia and Oceania

Number of memberships 2.5 million

Acquisition date Oct. 7, 2015

MIMS group global coverage MIMS group profile

MIMS Group Profile

© SMS CO., LTD. 50

3

HCPs Pharmacompanies

50 years of history Utilized by healthcare

institutions/HCPs to get drug information on a daily basis

2.5 million HCP memberships Most manufacturers of new drugs in the region post information of their drugs on MIMS’s database

1.Overwhelming brand value

3.Business relationshipswith pharma companies

2.Strong membership base of HCPs

Strengths of MIMS group include its overwhelming brand value in Asia and Oceania, strong membership base of healthcare professionals (HCPs), and business relationships with pharmaceutical companies.

Strengths of MIMS Group

© SMS CO., LTD. 51

3 Business Model of MIMS

Healthcare DataPharma Marketing

Medical/healthcare-related companies

HCPs(e.g. doctors, nurses,

pharmacists)

Optimized marketing solutions

Medical/healthcare information via various channels (publication, web, event etc.)

Healthcare institutions(e.g. hospitals, clinics,

pharmacies)

• Drug database• Database can be integrated

into core systems of healthcare institutions

FeeFee

Support marketing activities of medical/healthcare-related companies

Provide a drug database for prescription error checks in healthcare institutions

*1. Operators such as pharmaceutical companies, medical device manufacturers and healthcare service operators

© SMS CO., LTD. 52

3

MIMS P/L statement is consolidated to SMS P/L statement following a time lag of three months.

Consolidation of MIMS Financial Results

︓SMS consolidated P/L (excl. MIMS) ︓MIMS P/L

*1. Q1-Q4 presented above are those of the fiscal year of SMS. SMS fiscal year ends in March, while MIMS fiscal year ends in December.

Illustration of MIMS P/L Consolidation to SMS Consolidated P/L（excl. MIMS）*1

Q1

Jul-Sep P/L

Apr-Jun P/L

Apr-Jun P/L

Jan-Mar P/L

Oct-Dec P/L

Jul-Sep P/L

Q2 Q3FY03/19

Jan-Mar P/L

Oct-Dec P/L

Q4 Q1

Jul-Sep P/L

Apr-Jun P/L

Apr-Jun P/L

Jan-Mar P/L

Q2FY03/20

・・・

・・・

© SMS CO., LTD. 53

3

*1. As of Oct. 2019*2. Career businesses for doctors and pharmacists are operated by M3 Career, Inc., a JV between M3, Inc.(51%) and SMS (49%).*3. RAD: Recruiting Ads RAG: Recruiting Agent

Sub-Segment Category Services

Elderly Care Career

Services for care workers

Others

MedicalCareCareer

RAG*3

services

Others

Business Portfolio – Career*1*2

RAG *3 for care managersRAG *3 for PT/OT/ST

Certification courseinformation

RAG *3 for nurses RAG *3 for medicaltechnologists

RAG *3 for dietitians

HR solutionfor hospitals

RAG *3 for radiological technologists

RAG *3 for clinical engineers

Web community fornurses and student nursesRAD *3 for nurses RAD *3 for newly-graduated

nurses Scholarship information portal

Web community forcare managers

RAD*3 for care workers Temporary staffing forcare workers

Elderly carecertification course

RAG *3 for care workers

RAG *3 for Judo therapists etc.RAG *3 for childcare workers

RAD *3 for Judo therapists etc.

Chiropracticcertification course

National examinationreference book for Judo

therapists etc.

© SMS CO., LTD. 54

3

Segment Services

Kaipoke

Overseas

New Business

Business Portfolio*1 – Kaipoke/Overseas/New Business

Drug information service forhealthcare professionals and

institutions

Web community for managersof elderly care operators

Management support platformfor elderly care operators

Online academicmedia for nurses

Cross-border RAG*2 for healthcare professionals

(Malaysia, Philippines, Ireland, UK, etc.） Medical ad services（Philippines, Indonesia, Malaysia）

Career related service for nurses(South Korea)

Housing renovationoperators search site

Preventive solution oflifestyle diseases

Health guidance solution

Remote industrial health service

Information portalof industrial

health service

Health maintenance /promotion support for women

Information portal of dementia

Solution for dementiaprevention

Habituation support of dementia prevention

Information portal of diabetes

Web community for dietitians

Q&A site on health

Web community for peoplecaring for their families

Home-delivered meals search site

Information of funeral companies

Information portal of housing for the elderly

*1. As of Oct. 2019*2. Recruiting Agent

Preventive solution forworkforce departure

due to family care

Personalizedanti-smoking solution

© SMS CO., LTD. 55

3 History of Service Launces 1/4

Elderly Care

Career

03/04 03/05 03/06 03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16 03/17 03/18 03/19 03/20

RAG*1 for care managers: Care Jinzai-bank May 2003

Certification course information: Shikatoru Nov. 2003

RAD *1 for care workers: Kaigo Job Mar. 2004

Web community for care managers: Care Mane.com Sep. 2006

RAG *1 for PT/OT/ST: PT/OT Jinzai-bank Sep. 2008

RAG *1 for care workers: Kaigo Job Agent Aug.2014

Elderly care certification course: Kaigo Job Academy Oct. 2015

Temporary staffing for care workers: Kaigo Job Partners Dec.2016

*1. RAD: Recruiting Ads RAG: Recruiting Agent

© SMS CO., LTD. 56

3 History of Service Launces 2/4

Medical Care

Career

03/04 03/05 03/06 03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16 03/17 03/18 03/19 03/20

RAG *1 for nurses: Nurse Jinzai-bank Sep. 2005

RAD *1 for nurses: Nurse-senka Kyujin-navi Jul. 2006

Web community for nurses and student nurses: Nurse-senka Community Aug. 2006

RAG *1 for doctors: M3 Career Agent Aug. 2006

RAG *1 for pharmacists: Yaku Kyari Agent Apr. 2007

RAD *1 for newly-graduated nurses: Nurse-senka Shusyoku-navi Aug. 2009

HR solution for hospitals Apr. 2011

RAG *1 for dietitians: Eiyoshi Jinzai-bank May 2012

Scholarship information portal: Kango Shogakukin-navi Oct. 2012

RAG *1 for medical technologists: Kensagishi Jinzai-bank Sep. 2013

RAG *1 for clinical engineers: Kogakugishi Jinzai-bank Jul. 2014

RAG *1 for radiological technologists: Hoshasengjshi Jinzai-bank Jun. 2014

RAG *1 for Judo therapists etc.: WILLONE Nov.2017

RAG *1 for childcare workers: Hoikushi Jinzai-bank Oct.2018

Company split and succeeded to M3 career at the end of Dec. 2009

*1. RAD: Recruiting Ads RAG: Recruiting Agent

© SMS CO., LTD. 57

3 History of Service Launces 3/4

Medical ad services Jan. 2015

Elderly Care

Operators

Overseas

New Business

03/04 03/05 03/06 03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16 03/17 03/18 03/19 03/20

Management support service for elderly care operators: Kaipoke Jul. 2006

(South Korea) Career related service for nurses: Nurscape Sep. 2011

Drug information service for healthcare professionals and institutions: MIMS Oct. 2015

Cross-border RAG*1 for Healthcare Professionals Jun. 2017

Information portal of housing for the elderly: Kaigo DB Jul. 2006

Web community for people caring for their families: Anshin Kaigo Jun. 2009

Web community for dietitians: Eichie Jun. 2011

Information portal of dementia: Ninchisho Net Aug. 2011

Home-delivered meal search site: Lifood Nov. 2013

Q&A site on health: Narukara Dec. 2013

*1. RAG: Recruiting Agent

© SMS CO., LTD. 58

3 History of Service Launces 4/4

03/04 03/05 03/06 03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16 03/17 03/18 03/19 03/20

NewBusiness

Web community for managers of elderly care operators: Kaigo Must Feb. 2015

Online academic media for nurses: Nurse Senka Plus Apr.2016

Housing renovation operators search site: Hapisumu Apr.2016

Information portal of diabetes: Tonyobyo Net Jul. 2016

Solution for dementia prevention: Nintore Apr. 2017

Preventive solution of lifestyle diseases: Remote Chat Guidance Apr. 2017

Habituation support of dementia prevention: Nintore Challenge Oct. 2017

Health guidance solution: Remote Chat Guidance Oct. 2017

Information of funeral companies: Anshin Sougi Mar. 2018

Health maintenance/promotion support for women: Lady to Go Dec. 2018

Remote industrial health service: Remote Sangyo Hoken Apr. 2019

Information portal of industrial health service: Sanchie Apr. 2019

Preventive solution for workforce departure due to family care: Remote Kaigo Sodan July. 2019

Personalized anti-smoking solution: Kinen Shido Service July. 2018

© SMS CO., LTD. 59

3 Dividends

*1. Past stock splits are taken into account for the DPS calculation.

0.6251.25 1.5

22.5

3.5 3.5

5.5

6.5

7.5

6.8%

11.6%12.3%

13.6%14.8%

15.6%

12.5%

16.3% 16.8%

15.5%

FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 FY03/19

Payout ratio

DPS*1 (JPY)

© SMS CO., LTD. 60

3 Historical Financial Results

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Net Sales 58 383 835 1,545 2,715 5,177 7,172 7,618 8,692 10,181 12,046 15,056 19,069 23,054 26,611 30,836

OperatingIncome

▲5 52 109 269 426 1,230 1,261 1,480 1,519 1,570 1,730 2,079 2,756 3,646 4,021 4,743

OrdinaryIncome

▲5 49 108 269 415 1,238 1,266 1,530 1,734 1,990 2,340 2,693 3,509 4,430 5,007 5,979

NetIncome

▲5 31 63 157 244 719 717 876 1,004 1,226 1,380 1,824 2,265 2,801 3,361 4,216

EPS*1

(JPY)▲5.8 1.8 1.5 2.2 3.3 9.2 9.2 11.1 12.2 14.9 16.8 22.4 27.9 33.7 38.7 48.5

TotalAssets

59 357 566 1,016 1,806 3,118 3,645 4,672 5,716 6,948 8,406 11,421 41,689 43,231 46,087 47,467

Liabilities 55 166 196 489 822 1,410 1,266 1,430 1,579 1,794 2,331 4,497 28,532 21,648 22,446 31,928

NetAssets

4 190 369 527 983 1,708 2,379 3,242 4,136 5,153 6,074 6,923 13,157 21,583 23,641 15,539

Equity Ratio（%）

7.5 53.3 65.3 51.9 54.4 54.8 65.2 69.2 72.3 74.1 71.5 59.7 20.5 39.6 41.8 32.4

ROE （%）

▲124.9 31.8 22.8 35.1 32.3 53.4 35.1 31.2 27.3 26.4 24.7 28.4 29.5 21.8 18.5 24.4

DPS*1

（JPY）- - - - - 0.625 0.625 1.25 1.5 2 2.5 3.5 3.5 5.5 6.5 7.5

DividendPayout Ratio（%）

- - - - - 6.8 6.8 11.6 12.3 13.6 14.8 15.6 12.5 16.3 16.8 15.5

TSR*2

（%）- - - - - - - - - - 177.1 514.5 1,150.3 1,057.5 682.8 402.3

*1. Past stock splits are taken into account for the EPS and DPS calculations.*2. （Ending share price of the fiscal year＋Total dividends paid over 5 years) / Ending share price 5 fiscal years ago

(JPY million)

3

© SMS CO., LTD. 61

3

Number of Employees

As of Sept. 30, 2019:

Number of shareholders 4,549

As of Sept. 30, 2019:

Number of Employees and Shareholder Composition

Employees (consolidated) 3,001Japan 2,204

Overseas 797

*1. Pie chart shows the ratio of number of stocks held by each category.

Shareholder Composition

Founder19%

Domestic InstitutionalInvestors

34%

Directors, Employees and Shareholding associations1%

Individual Investors6%

Others4%

Foreign InstitutionalInvestors

36%

© SMS CO., LTD. 62

Cautionary Statement with Respect to Forward-Looking Statements

62

These materials contain forward-looking statements, including estimates, projections, and statements related to the business operations of SMS CO.,LTD. (hereinafter, “the Company”) based on current expectations and assumptions in light of the information available to the Company as ofSeptember 30, 2019. These forward-looking statements are not guarantees of future performance and involve known and unknown risks,uncertainties and other factors that may cause the Company’s actual results, performance, achievements or financial position to be materiallydifferent from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Thesefactors include, but are not limited to:・changes in economic conditions, market demand, and the competitive environment affecting Japan, Asia and other markets in

which the Company operates;

・reliance on digital and information technology, including with respect to the handling of elderly care, medical care and otherclient information and operation of the Company’s online community services;

・inability to effectively execute M&A/business alliance and overseas expansion strategies;

・changes in the laws, regulations and government policies in the markets in which the Company operates, particularly relating toemployment placement, elderly care and medical care;

・any damage to the brand image;

・risk of infringing intellectual property rights;

・fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the US dollar, the Singaporedollar, the Hong Kong dollar and the Australian dollar; and

・risk of impairment losses, particularly with respect to goodwill, trademark right and customer-related assets recognized in connection of theacquisition of Medica Asia (Holdco) Limited in October 2015.

A discussion of these and other factors which may affect the Company’s actual results, performance, achievements or financial position is describedin “Business Risks” contained in the Company’s corporate website*1.We do not intend, and disclaim any duty, to update or revise any forward-looking statements contained in these materials to reflect new information,future events or otherwise. We caution you not to place undue reliance on any forward-looking statements contained in these materials.*1. https://www.bm-sms.co.jp/en/ir/policy/risk/

For any inquiries on the materials, please contact below:Finance & Accounting Department E-mail: irinfo@bm-sms.co.jp Phone: +81-3-6721-2403